Fixed charge bills worsening fuel poverty

Fixed charge fuel bills are causing hardship for thousands of people living in council and social housing and should be scrapped, according to energy expert Jayne Clare.

Ms Clare, whose company Switch2 is helping local authorities and social landlords across the UK switch from fixed charge systems to the latest smart-metering payment technologies that mean tenants only pay for the energy they actually use, says that the new smart systems typically cut tenants' energy bills by at least 30%.

She points to Oldham where the fuel bills of more than 2,000 council households, spread over 40 centrally heated sites, have been dramatically cut following installation of smart heat metering systems and control panels.

Some residents who previously paid over £60 per month for their heating through a fixed charge system have seen that figure drop below £25 after smart metering systems were installed.

"The technology is working for thousands of people in Oldham and it would work for many thousands more across the country. Oldham proves that we don't have to wait until 2010 (the government's target date for the eradication of fuel poverty) to make a huge difference to the lives of thousands of people struggling to pay to keep warm," said Ms Clare.

First Choice Homes, a not-for-profit organisation that manages Oldham Metropolitan Borough Council's 14,000 dwellings, says that the installation of the new smart systems has been a big success.

Hugh Broadbent, First Choice Homes' chief executive, said: "The fixed charge was unfair from every angle. It gave tenants no control over how much or how little energy they used - frugal users paid the same fixed charge as users who had their heating on full blast 24/7.

"The new system puts tenants in control of their energy use and within three months of installation of the Switch2 system fuel bills for the vast majority of tenants were substantially less."

The Oldham project, part of the local council's strategy to combat fuel poverty, is seen as a model for other local authority and social housing across the UK.

The new metering and control system provides First Choice Homes with data that shows how much energy each household has actually used and accurate statements are issued to each household. Tenants are able to check their energy consumption on the FCH website.

The data collected from meter readings so far show that fuel bills have been cut by around 30 per cent for most tenants and by as much as 60 percent for some.

Leslie Jagger, a single man, has seen his monthly fixed charge bill fall from £64 a month to an average of £24 a month. "My bills are a fraction of what they were. The new system has made a huge difference to me because now I pay only for what I use and I'm in control. All I have to do is use the simple control board."

Jayne Clare said: "Mr Jagger's experience is typical of tenants who have switched from the fixed charge to the new system but thousands of other council and social housing tenants across the country are still on the fixed charge system and are paying far too much for their energy and that is pushing many into fuel poverty."